- After years of vast underperformance, Small Cap Value stocks have returned -11% compared to -26% for Large Cap Growth stocks YTD.
- History and valuations suggest we are in the early innings to capture this opportunity and can be telling as to what investor sentiment will look like going forward.
- We believe small cap value strategies are well-positioned to provide investors an opportunity to compound capital in this next cycle. The graphs below tell the story for Small Cap Value.
A Difficult 5 Years for Small Cap Value (2017-2021)
But Small Cap Value Has Outperformed YTD ’22
Small Cap Value Fwd P/E 32% Discount vs. S&P 500 Growth
We’ve Seen This Before…Small Cap Value
But Then Small Cap Value Outperformed ’00-’06 (7 Years!)
Ultimately, Small Cap Value Outperformed Over ’95-’06
Rising Rates Are Historically a Relative Tailwind for Small Cap Value
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There are inherent limitations regarding hypothetical or estimated information. There can be no assurance that such values can be realized or that actual results will not differ materially from those presented. Actual returns to investors will be reduced by expenses such as performance fees. There is a significant risk that pro forma financials may never be realized if the assumptions are incorrect, incomplete, or other intervening factors which are not contemplated in the pro forma assumptions
 Small Cap Value Index represents data taken from the Russell 2000 Value Index returns ending June 10, 2022. The Large Cap Growth Stock returns represent data from the S&P Growth Indices.